James River Coal Company Reports Third Quarter 2012 Operating Results
-- Maintaining a Strong Balance Sheet with Available Liquidity of $172 Million

-- Through October 12, 2012, Repurchased $61.4 Million Principal Amount of Debt for $23.9 Million (Average of $0.39 on the Dollar)

-- Conference Call Slides Posted to Company Website

RICHMOND, Va., Nov. 7, 2012 /PRNewswire/ -- James River Coal Company (NASDAQ: JRCC), today announced that it had net loss of $20.6 million or $0.59 per diluted share for the third quarter of 2012 and net loss of $62.0 million or $1.78 per diluted share for the nine months ended September 30, 2012. Included in the third quarter results is a gain of $22.2 million from the repurchase of outstanding notes in open market purchases. The 2012 results are compared to net loss of $3.7 million or $.11 per diluted share for the third quarter of 2011 and net loss of $10.5 million or $0.33 per diluted share for the nine months ended September 30, 2011.

Peter T. Socha, Chairman and Chief Executive Officer commented: "We are very pleased to have the uncertainty of the U.S. presidential election behind us. We believe that this issue caused a temporary slowdown in economic growth both in the United States and globally. The slowdown in growth, combined with warm weather last winter, has contributed to an unusually weak market for thermal and metallurgical coal. Hopefully, this condition will be corrected shortly.

"Despite the soft coal markets, we continue to be pleased with the performance of our mine operations team. They made a series of adjustments to their operating plans in response to the current markets. In the financial area, we decided to take the opportunity to reduce our debt at very advantageous market prices due to external events. We believe that we were able to successfully balance our desire for a strong and liquid balance sheet with a window of opportunity that was available to us."

FINANCIAL RESULTS

The following tables show selected operating results for the quarter and nine months ended September 30, 2012 compared to the quarter and nine months ended September 30, 2011 (in 000's except per ton amounts).

Total Results

Three Months Ended September 30,

Nine Months Ended September 30,

2012

2011

2012

2011

Total

Per Ton

Total

Per Ton

Total

Per Ton

Total

Per Ton

Company and contractor production (tons)

2,229

2,816

7,571

7,578

Coal purchased from other sources (tons)

631

284

1,428

896

Total coal available to ship (tons)

2,860

3,100

8,999

8,474

Coal shipments (tons)

3,164

3,163

9,125

8,497

Coal sales revenue

$ 264,633

83.64

$ 291,575

92.18

$ 804,024

88.11

$ 783,612

92.22

Freight and handling revenue

23,469

7.42

12,283

3.88

63,421

6.95

36,865

4.34

Cost of coal sold

244,365

77.23

245,240

77.53

705,568

77.32

642,167

75.58

Freight and handling costs

23,469

7.42

12,283

3.88

63,421

6.95

36,865

4.34

Depreciation, depletion, & amortization

35,518

11.23

31,234

9.87

98,152

10.76

75,479

8.88

Gross profit (loss)

(15,250)

(4.82)

15,101

4.77

304

0.03

65,966

7.76

Selling, general & administrative

14,672

4.64

16,344

5.17

45,504

4.99

40,525

4.77

Acquisition costs

-

-

-

8,504

Adjusted EBITDA plus acquisition costs (1)

$ 7,556

2.39

$ 32,265

10.20

$ 59,638

6.54

$ 110,416

12.99

(1)

Adjusted EBITDA plus acquisition costs is defined under "Reconciliation of Non-GAAP Measures" in this release.

Adjusted EBITDA is used to determine compliance with financial covenants in our revolving credit facility.

Segment Results

Three Months Ended September 30,

Nine Months Ended September 30,

2012

2011

2012

2011

CAPP

Total

Per Ton

Total

Per Ton

Total

Per Ton

Total

Per Ton

Company and contractor production (tons)

1,607

2,225

5,784

5,703

Coal purchased from other sources (tons)

631

284

1,428

896

Total coal available to ship (tons)

2,238

2,509

7,212

6,599

Coal shipments (tons)

Steam (tons)

1,540

1,983

4,716

5,257

Metallurgical (tons)

1,007

582

2,632

1,343

Total Shipments (tons)

2,547

2,565

7,348

6,600

Coal sales revenue

Steam

$ 122,116

79.30

$ 174,325

87.91

$ 391,211

82.95

$ 477,742

90.88

Metallurgical

115,104

114.30

90,434

155.38

333,859

126.85

225,078

167.59

Total coal sales revenue

237,220

93.14

264,759

103.22

725,070

98.68

702,820

106.49

Freight and handling revenue

23,105

9.07

11,757

4.58

61,575

8.38

35,073

5.31

Cost of coal sold

$ 221,961

87.15

$ 221,482

86.35

$ 638,266

86.86

$ 570,975

86.51

Freight and handling costs

23,105

9.07

11,757

4.58

61,575

8.38

35,073

5.31

Three Months Ended September 30,

Nine Months Ended September 30,

2012

2011

2012

2011

Midwest

Total

Per Ton

Total

Per Ton

Total

Per Ton

Total

Per Ton

Company and contractor production (tons)

622

591

1,787

1,875

Coal purchased from other sources (tons)

-

-

-

-

Total coal available to ship (tons)

622

591

1,787

1,875

Coal shipments (tons)

617

598

1,777

1,897

Coal sales revenue

$ 27,413

44.43

$ 26,816

44.84

$ 78,954

44.43

$ 80,792

42.59

Freight and handling revenue

364

0.59

526

0.88

1,846

1.04

1,792

0.94

Cost of coal sold

$ 22,404

36.31

$ 23,758

39.73

$ 67,302

37.87

$ 71,192

37.53

Freight and handling costs

364

0.59

526

0.88

1,846

1.04

1,792

0.94

LIQUIDITY AND CASH FLOW

As of September 30, 2012, the Company had available liquidity of $171.7 million calculated as follows (in millions):

Unrestricted Cash

$

151.4

Availability under the Revolver

81.2

Letters of Credit Issued under the Revolver

(60.9)

Available Liquidity

$

171.7

Restricted Cash

$

29.6

Capital expenditures for the third quarter were $20.6 million and $66.5 million for the nine months ended September 30, 2012.

During the third quarter of 2012, the Company repurchased $53.7 million of its outstanding debt, consisting of $5.0 million principal amount of the 2019 Senior Notes, $19.9 million principal amount of the 2018 Convertible Senior Notes and $28.8 million principal amount of the 2015 Convertible Senior Notes. The debt repurchases were made at a cost of $20.9 million, plus accrued interest of $0.8 million, in open market purchases. The repurchases resulted in a gain of $22.2 million, which includes the write-off of $0.9 million of financing costs. Additionally, in October 2012, the Company repurchased an additional $7.7 million its outstanding debt at a cost of $2.9 million, in open market purchases, consisting of $5.2 million principal amount of the 2018 Convertible Senior Notes and $2.5 million principal amount of the 2015 Convertible Senior Notes.

SALES POSITION

As of November 6, 2012, we had the following agreements to ship coal at a fixed and known price (in 000's except per ton amounts):

2013 Priced

As of August 8, 2012

As of November 6, 2012

Change

Tons

Avg Price Per Ton

Tons

Avg Price Per Ton

Tons

Avg Price Per Ton

CAPP (1)

1,337

$ 79.32

3,405

$ 74.04

2,068

$ 70.63

Midwest (2)

2,140

$ 45.35

2,342

$ 45.25

202

$ 44.19

2014 Priced

As of August 8, 2012

As of November 6, 2012

Change

Tons

Avg Price Per Ton

Tons

Avg Price Per Ton

Tons

Avg Price Per Ton

CAPP (1)

300

$ 75.75

300

$ 75.75

-

$ -

Midwest (2)(3)

700

$ 49.00

900

$ 47.64

200

$ 42.88

(1) Priced tons in CAPP in 2013 do not include approximately 1,100,000 tons of met coal that have been sold but not yet priced.

(2) The prices for the Midwest are minimum base price amounts adjusted for projected fuel escalators.

(3) 200,000 tons of 2012 coal moved to 2014.

CONFERENCE CALL, WEBCAST AND REPLAY: The Company will hold a conference call with management to discuss the quarterly earnings November 7, 2012 at 11:00 a.m. Eastern Time. The conference call can be accessed by dialing 877-340-2553, or through the James River Coal Company website at http://www.jamesrivercoal.com/. International callers, please dial 678-224-7860. A replay of the conference call will be available on the Company's website.

James River Coal Company is one of the leading coal producers in Central Appalachia and the Illinois Basin. The company sells metallurgical, bituminous steam and industrial-grade coal to electric utility companies and industrial customers both domestically and internationally. The Company's operations are managed through eight operating subsidiaries located throughout eastern Kentucky, southern West Virginia and southern Indiana. Additional information about James River Coal can be found at its web site www.jamesrivercoal.com

FORWARD-LOOKING STATEMENTS: Certain statements in this press release and other written or oral statements made by or on behalf of us are "forward-looking statements" within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. Forward looking statements include, without limitation, statements regarding future sales and contracting activity, and projected fuel escalators. These forward-looking statements are subject to a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, the following: our cash flows, results of operation or financial condition; the consummation of acquisition, disposition or financing transactions and the effect thereof on our business; our ability to successfully integrate International Resource Partners LP and its related entities (IRP); governmental policies, regulatory actions and court decisions affecting the coal industry or our customers' coal usage; legal and administrative proceedings, settlements, investigations and claims; our ability to obtain and renew permits necessary for our existing and planned operation in a timely manner; environmental concerns related to coal mining and combustion and the cost and perceived benefits of alternative sources of energy; inherent risks of coal mining beyond our control, including weather and geologic conditions or catastrophic weather-related damage; our production capabilities; availability of transportation; our ability to timely obtain necessary supplies and equipment; market demand for coal, electricity and steel; competition; our relationships with, and other conditions affecting, our customers; employee workforce factors; our assumptions concerning economically recoverable coal reserve estimates; future economic or capital market conditions; our plans and objectives for future operations and expansion or consolidation; and the other risks detailed in our reports filed with the Securities and Exchange Commission (SEC). Management believes that these forward-looking statements are reasonable; however, you should not place undue reliance on such statements. These statements are based on current expectations and speak only as of the date of such statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise.

JAMES RIVER COAL COMPANYAND SUBSIDIARIESReconciliation of Non GAAP Measures(in thousands)(unaudited)

EBITDA is used by management to measure operating performance. We define EBITDA as net income or loss plus interest expense (net), income tax expense (benefit) and depreciation, depletion and amortization (EBITDA), to better measure our operating performance. We regularly use EBITDA to evaluate our performance as compared to other companies in our industry that have different financing and capital structures and/or tax rates. In addition, we use EBITDA in evaluating acquisition targets.

Adjusted EBITDA is defined as EBITDA as further adjusted for certain cash and non-cash charges as specified in our revolving credit facility and is used in several of the covenants in that facility. Adjusted EBITDA plus acquisition costs further adjusts Adjusted EBITDA to add back certain non-recurring costs incurred in connection with the IRP acquisition that may not reflect the trend of future results. We believe that Adjusted EBITDA plus acquisition cost presents a useful measure of our ability to service and incur debt on an ongoing basis.

EBITDA, Adjusted EBITDA, Adjusted EBITDA plus acquisition costs are not recognized terms under GAAP and are not an alternative to net income, operating income or any other performance measures derived in accordance with GAAP or an alternative to cash flow from operating activities as a measure of operating liquidity. Because not all companies use identical calculations, this presentation of EBITDA, Adjusted EBITDA, Adjusted EBITDA plus acquisition costs may not be comparable to other similarly titled measures of other companies. Additionally, EBITDA, Adjusted EBITDA, Adjusted EBITDA plus acquisition costs are not intended to be a measure of free cash flow for management's discretionary use, as they do not reflect certain cash requirements such as tax payments, interest payments and other contractual obligations.